Businesses make a profit - bad news?

wotsthat

There's been some indignation in some parts of the press over the last few days about the profits of some UK listed companies.

Centrica £1.3bn in 6 months http://www.bbc.co.uk/news/business-14321673

Shell $8bn in 3 months http://www.bbc.co.uk/news/business-14321819

BP $5.3bn in 3 months http://www.bbc.co.uk/news/business-14301620

I'm finding it difficult to get too upset especially as, both indirectly and directly, these three companies will be helping to fund UK private pensions both now and in the future. If anything the results were a little disappointing.

Am I missing something?

Graham_Devon

wotsthat wrote: »

Am I missing something?

Kind of.

Depends on the stance people wish to take really. But people WILL die this winter due to not being able to afford to heat their homes sufficiently.

So on the one hand, you have got profits for those with enough money to invest in the first place.

On the other, you have those people with no money to invest in the first place, paying the price, and unfortunately in some cases, passing away somewhat prematurely.

This isn't meant to be some sort of guilt ridden type post. You just asked if you had missed something, which I believe you have.

The price rises, and the profit, is only good for those with enough money to invest in the first place. I.e. rich get richer, while everyone else suffers. I'm no socialist, but can see the issues here.

wotsthat

Isn't it more to do an inbuilt British distaste for success?

If the primary motivator for the indignation was concern about old people in the winter wouldn't we be seeing droves of concerned people checking up on old people during each cold snap?

Graham_Devon

wotsthat wrote: »

Isn't it more to do an inbuilt British distaste for success?

If the primary motivator for the indignation was concern about old people in the winter wouldn't we be seeing droves of concerned people checking up on old people during each cold snap?

Certainly think there is merit in what you say. However, I feel we pick and choose what we have a distaste for.

Certainly we have a distaste for large companies, but I personally feel this is because we have had such lax governments doing nothing about said companies. We've got bodies set up, such as OfCom who, for all intents and purposes, just release statements after the event. Give it a year, the body that covers these utility companies will be saying "well they shouldn't have done that, we might have to do something about that in the future". Always seems to be after the event.

Digressing now, but don't feel the british have a distaste for success per se. More a problem with the state of the entire system.

It also depends on political leanings. For example, many people may agree with you, that it's always positive that big business makes a profit....

...But ask them about the murdochs and they would back anything which sees the demise of them.

Really2

Graham_Devon wrote: »

But people WILL die this winter due to not being able to afford to heat their homes sufficiently.

Indeed, but they will die this summer because of the heat also (well pushing it a bit this summer )

As a nation we have got a bit "T shirt in winter". Education on heating is required more than cheap fuel.

Generali

wotsthat wrote: »

Isn't it more to do an inbuilt British distaste for success?

If the primary motivator for the indignation was concern about old people in the winter wouldn't we be seeing droves of concerned people checking up on old people during each cold snap?

Too much effort. It's easier to write a stroppy piece in the Guardian or Daily Mail readers' comments section.

The national scandal in France a few years back when a lot of older people died during a heatwave was that nobody cared enough to check up on them. Perhaps priorities ought to change in Britain.

michaels

I think you are wrong on this one - what has company profits got to do with income distribution - we have a govt with taxation and spending policies to handle the later.

Let me illustrate with an example. The govt has increased taxes on N Sea gas. This makes it more profitable for Centrica to leave some gas under ground that they would otherwise have pumped. All things being equal, had that gas been available the price for consumers would be lower - thus doing something that has reduced profitability for Centrica has resulted in higher gas prices for consumers. Take this to the extreme where Centrica make no profit supplying gas to UK consumers and they will stop doing so - is that likely to lead to lower prices or higher?

If you don't like the distribution of wealth then get the govt to redistibute it - similarly income.

Graham_Devon wrote: »

Kind of.

Depends on the stance people wish to take really. But people WILL die this winter due to not being able to afford to heat their homes sufficiently.

So on the one hand, you have got profits for those with enough money to invest in the first place.

On the other, you have those people with no money to invest in the first place, paying the price, and unfortunately in some cases, passing away somewhat prematurely.

This isn't meant to be some sort of guilt ridden type post. You just asked if you had missed something, which I believe you have.

The price rises, and the profit, is only good for those with enough money to invest in the first place. I.e. rich get richer, while everyone else suffers. I'm no socialist, but can see the issues here.

michaels

Also, specically for energy, high prices are a signal that supply is scarce - the options are to Canute-like apply ever increasing subsidies to consumers which can not be sustained for ever or use price to signal to consumers that it is worth improving energy efficiency and that may be lower house temperatures with more clothing may be needed.

MFW_10YRS_4

michaels wrote: »

Also, specically for energy, high prices are a signal that supply is scarce - the options are to Canute-like apply ever increasing subsidies to consumers which can not be sustained for ever or use price to signal to consumers that it is worth improving energy efficiency and that may be lower house temperatures with more clothing may be needed.

With more insulation installed in buildings and heating systems zoned so that instead of the whole house being at a constant temperature, bedroom, bathrooms, hallways and living areas are at differing temperatures.

I actually believe that high fuel prices are no bad thing, it forces governments to take action (the new part F building regs are almost all about acceptable insulation levels and U/R values) and individuals too (walking more, wearing jumpers in the house, insulating their homes, fitting energy efficient appliances and heating systems).

tr3mor

I'm a fan of big successful businesses that innovate, sell good products/services and are subject to proper competition.

I'm not a fan of big successful businesses that operate in cartels, sell rubbish, overpriced products/services and lobby government for anti-competitive regulation.

:money:

wotsthat

Really2 wrote: »

Indeed, but they will die this summer because of the heat also (well pushing it a bit this summer )

As a nation we have got a bit "T shirt in winter". Education on heating is required more than cheap fuel.

This can be linked to michaels' comment about wealth distribution which is the job of governments rather than businesses.

The government found it easy to link child benefit to paying higher rate tax. I'm not sure why it wouldn't be as simple to increase the winter fuel allowance but not to pensioners who pay higher rate tax. I know at least two pensioners paying higher rate tax who get the winter fuel allowance.